Linn Group Morning Corn Comment

CHICAGO - Jan 22/08 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market was lower on Friday as the market continued to see some
profit taking, talk of a broad US recession, and better weather forecast for
So. America.  Corn has rallied almost 45 cents since the release of the USDA
report and traders said there just isn't the fundamental data to support
this rally right now.  Traders also looking at outside markets as providing
pressure on the grain markets as energies, metals, and stocks all selling
off helping push the grain markets higher as the world looking at a bigger
possibility for a US recession which would be negative for grain markets.
The soy complex seemed to lead the grains lower on Friday, with corn being a
follower right now.  Volume was light/moderate and funds were net sellers on
the day of 4,000 contracts.  The weather in Argentina remains a mixed bag as
different areas are receiving rains, but not the big rains that some areas
need to recover the soil moisture levels that have been depleted by the dry
planting season.  The forecast is calling for rains this week, but the
market will probably wait and see how good the rains develop before really
selling the markets.

The eCBOT session was much lower overnight as we saw a huge sell off in the
global markets with the US markets closed because MLK Day and that global
sell off pushed its way into the grain markets.  Traders also said that
besides the global sell off in all markets, Argentina received rains over
the weekend and the forecast this week has rains coming into Argentina
pretty much across the country with pretty good coverage.  Traders may want
to talk about the rains across So. America, but the bigger talk will be
about fund liquidation in the grain markets because of a possible US
recession and traders worried about a slow down in China which has a big
effect on the demand for US grain.  The corn market was limit down late in
the trading session but did trade off the limit on the close of the night
session.  I would have called the corn market limit down this morning on the
opening, but since the grains closed, the FED announced a 75 basis point
rate reduction which should have a positive effect on the grain markets, but
nobody knows if the funds start to liquidate.  When we fund liquidation, it
usually happens over 2-3 days so assuming last nights action was the first
day, we could see another day or two of fund liquidation.  Technicians
pointing to a possible island top in the corn market which they would view
as very negative.  Corn will be called 15-20 lower and it will closer to the
opening before we get an accurate opening call.

Globex Overnight

Contract            Last      Net Change       High      Low

ZCH8                479^2    -19^0                 491^6    478^2

ZCK8                490^4    -20^0                 504^0    490^4

ZCN8                500^2    -19^2                 513^0    499^4

ZCU8                495^2    -20^0                 509^6    495^2

ZCZ8                 495^0    -20^0                 507^0    495^0

Early Opening Calls: down 15-20 cents

Top News

-- Traders report total of 330,000 mt US Corn sought in tender by S Korean
corn group.  The tender is for 6 tranches of 55,000 mt each for delivery
between July & August

-- Dalian Sept Corn futures closed the overnight session 33 lower to 1,723
Yuan/mt on 599,000 contracts traded. ($1=7.25 Yuan)

-- Globex Corn Vol: 119,153; Pit Vol.: 28,823; Open Interest change: +4,347

-- Weather: 6-10 Day Forecast: Normal to Below Temps. Normal to Below
Precip. The Corn Belt will see light snow and snow showers today. Wednesday
into Saturday looks dry. Temps normal to below.

-- Outside markets: Energy Complex -2.91 at $$87.66; Gold & Silver: -6.4 at
$875 & -0.371 at $15.85; US $ is higher vs. Euro and lower vs. Yen

Cash Markets

-- CIF Corn up 1 to 5. Jan. +40 to +43, Feb. +43 to +??, Mar. +45 to +48,
Apr. +38 to +40, May +40 to +??, June +37 to +39, July +40 to +??,

TREND:

The Bush stimulus package of $150 bil announced on Fri gave the market a bit
of support.

Cash bounced back some on what appears to be renewed export interest brought
about by lower ocean freight, lower basis levels and the break in futures
off recent highs.

Other than quality wheat, the market feels toppy but should find support on
minor weakness.

Down 15 to 20 cents in corn, 50 cents in beans, and 25 to 30 cents in wheat



If you have any questions or want to discuss specific trade recommendations,
contact me directly.

Jim Riley
Linn Group
877-787-6278
jriley@linngroup.com
www.linngroup.com/

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